Use this objectives-and-stakeholders page to identify aims, explain stakeholder effects and judge conflicts using case evidence.
TCH is a small bakery producing pastries and cakes. It operates in the secondary sector. The added value of TCH's products has increased since it opened 3 years ago. TCH uses non-financial methods to motivate its 6 employees. TCH's business objectives have changed since it started up. One of its new objectives is to expand. Many businesses use external recruitment when they expand.
Outline two reasons why TCH's business objectives might have changed.
Reason 1:
Reason 2:
HRO manufactures children's toys. It is a private limited company. The main objective of HRO 's shareholders is to increase profit. This might conflict with the objectives of other stakeholder groups, including its 30 suppliers. HRO's Managing Director knows that market research can help when making marketing decisions. The Finance Director is preparing HRO's statement of financial position. An extract is shown in Table 3.1.
Table 3.1
Explain one way the objective of HRO's shareholders to increase profit might conflict with the objectives of each of the following stakeholder groups:
Customers:
Explanation:
Suppliers:
Explanation:
DCN is a large chemical company. It has 8000 employees across its 3 factories. DCN has agreed to set up a joint venture with a glass making business to develop a new type of environmentally friendly packaging. DCN's Managing Director said: 'There are disadvantages to a joint venture. The companies have different leadership styles and business objectives. We will need to look at ways to overcome possible communication barriers.'
Define 'business objective'.